high low method machine hours

Using the high-low method estimate a cost formula formaintenance in the form Y a bX. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year.

High Low Method Calculate Variable Cost Per Unit And Fixed Cost

Month Utilities Machine Hours January.

. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year. High Low Method is not representative of entire data as it is based on just 2 activity levels. What total overhead cost would you expect to beincurred at an activity level of 46000 machine-hours.

What is the estimate of the total cost when 300 machine-hours are used. The information for 20x3 is provided below. Machine-hours Labor Costs Highest observation of cost driver 400 10000 Lowest observation of cost driver 240 6800 2.

35115 per month b. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1200 machine hours with the following data being available for the first six months of the year. The high-low method involves taking the highest level of activity.

High-Low method is one of the several mathematical techniques used in managerial accounting to split a mixed cost into its fixed and variable components. Period Semi-Variable Costs Machine Hours 1 100000 22000 2 120000 30000 3 96000 23600 If 29000 machine hours were budgeted for the next period estimated semi-variable costs would total A. The cost of electricity used in a factory is likely to be a mixed cost since some of the electricity will vary with the number of machine hours while some of the.

Low High Machine-hours 51300 68400 Total factory overhead costs 222690 pesos 244920 pesos-----The factory overhead costs above consist of indirect materials rent and maintenance. Given a set of data pairs of activity levels ie. Indirect materials variable 56430 pesos Rent fixed 129000 Maintenance mixed 37260.

The company has analyzed these costs at the 51300 machine-hours level of activity as follows. Hotlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. Hotlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost.

Mixed costs are costs that are partially variable and partially fixed. 1249 per month c. Barkoff Enterprises which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost.

Assuming these are the high and low months of activity the estimated fixed maintenance costs using the high-low method is _____. Units labor hours machine hours etc and the corresponding total cost figures high-low method only takes two extreme data pairs ie. Use the high-low method to estimate the fixed and variable portion of overhead costs based on machine hours.

A manufacturing company estimates semi-variable costs by using the high-low method with machine hours as the cost driver. Hotlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost. 35406 per month d.

Month Machine hours Power cost Jun 300 680 Jul 600 720 Aug 400 695 Sept. The Hunter Company uses the high-low method to estimate the cost function. The lowest number of machine hours was 22000 and total semi-variable costs at that level were 100000.

Machine Hours Electrical Cost January 4000 3120 February 6000 4460 March 4800 3500 April 5800 5040 May 3600 2900 June 4200 3200 Required. Activity based costing can provide a more useful analysis of the behavior of cost in relation to distinct activities. Atlanta Inc which uses the high-low method to analyze cost behavior has determined that machine hours best explain the companys utilities cost.

Recent data are shown below. Using the high-low method calculate Octobers power cost using machine hours as the basis for prediction. Using the high-low method of analysis estimate the variable electrical cost per machine hour.

The high-low method is a simple technique for computing the variable cost rate and the total amount of fixed costs that are part of mixed costs. 200 640 Assume that management expects 500 machine hours in October. High Low Method assumes a linear relationship between cost and activity which is an over simplified analysis of cost behavior.

The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year. The highest and the. Express the companyâ s total overhead cost in theform Y a bX.

Machine-Hours Maintenance Costs Highest observation of cost driver 140000 280000 Lowest observation of cost driver 95000 190000 Difference 45000 90000 Maintenance costs a b Machine-hours Slope coefficient b 90000 45000 2 per machine-hour Constant a 280000 280000 0 or Constant a 190000. A company incurred 12000 of maintenance cost for 6500 machine hours in June and 14250 of maintenance costs for 8000 hours in August. In cost accounting a way of attempting to separate out fixed and variable costs given a limited amount of data.

If the plant is planning to operate at a level of 200 machine hours next period what would be the estimated overhead costs. The highest number of machine hours was 30000 and total semi-variable costs at that level were 120000. The companys relevant range of activity varies from a low of 600 machine hours to a high of 1100 machine hours with the following data being available for the first six months of the year.

Using the high-low method to estimate the variable and fixed components of this cost these estimates would be closest to.

Cost Behavior